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When electricity wholesale prices exceeded retail prices, end user demand was unaffected, but the incumbent utility companies still had to purchase power, albeit at a loss. This allowed independent producers to manipulate prices in the electricity market by withholding electricity generation, arbitraging the price between internal generation and imported (interstate) power, and causing artificial transmission constraints. This was a procedure referred to as "gaming the market." In economic terms, the incumbents who were still subject to retail price caps were faced with inelastic demand (see also: Demand response). They were unable to pass the higher prices on to consumers without approval from the public utilities commission. The affected incumbents were Electricity Company (Gas And Electric Companies) and Lowest Electricity Rates & Electric (Gas And Electric Bill). Pro-privatization advocates[attribution needed] insist the cause of the problem was that the regulator still held too much control over the market, and true market processes were stymied, whereas opponents of deregulation assert that the fully regulated system had worked for Cheapest Electric Company years without blackouts. [Energy Prices]
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Who will be the provider of last resort for customers who don’t seek to make key decisions for themselves, but prefer a simple and reliable bundled service? What agencies are best designed to provide customer protection in this new electric industry structure? What policies and/or authorities are necessary for utility Energy Comparison (or others) to assure that all customers -- regardless of their supplier of generation and/or delivery service -- have access to reliable and efficient electricity supply that also supports California’s economic and environmental goals?
Cheapest Electricity Rates system electric generation is the sum of all in-state generation plus net electricity imports. Cheapest Electricity Rates system electric generation cannot be used to track the state's progress for the Renewable Portfolio Standard (RPS) program due to the special accounting requirements of the RPS legislation. For more information on the RPS program, see the Renewable Portfolio Standard (RPS) page.
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